Alphabet shares declined after the company announced plans to nearly double capital expenditures in 2026, raising market concerns about pressure on profitability. GOOGL stock pulled back more than 6% from recent highs following the earnings release and new investment guidance.

Despite the sharp rise in capex, Alphabet’s financial performance remains resilient. The company’s operating cash flow grew by more than 30% in 2025, while free cash flow stayed above $73 billion, highlighting the effectiveness of its investments, particularly in artificial intelligence.

Experts note that even if capital expenditures rise to $175–185 billion in 2026, Alphabet is still capable of maintaining positive free cash flow. This reduces risks for long-term investors and supports interest in the stock despite short-term market volatility.